S.C.’s Nuclear Scandal, Political Corruption and Accountability

The current scandal of SCANA’s (S.C. Electric and Gas parent company) and Santee Cooper’s nuclear debacle is arguably the biggest scandal in our state’s history in the last 100 years.

It involves over $9 billion in wasted money which millions of South Carolinians are being asked to pay and the wholesale corruption of our Statehouse that enables it all to happen.

It is a sorted scandal of long-term political corruption, short term corporate incompetence (or worse) and the total denial of responsibility by all who are at fault.

If this isn’t the biggest scandal in our state’s history, please tell me what is.

And, the great irony is that it did not have to happen. It was totally preventable.

My recent columns on the nuclear scandal have generated a lot of response. Below, is an email that says it all:

Dear Phil,

I read the subject article, written by you, as part of a personal Google search launched to better educate myself on the shutdown of the V.C. Summer project. I am not a resident of your state or an investor in SCANA or any firm associated with the project. My interest comes from a life spent working in the nuclear industry. I have been blessed with opportunities as a Senior Reactor Operator, senior manager of multiple nuclear departments and executive positions in nuclear generation and support companies. I am committed to the view that nuclear generation is a carbon free source of electricity needed to maintain living standards in developed countries as well bring a better life to underdeveloped ones.

It is from this perspective that I SUPPORT your article. The collapse of the V.C. Summer project has resulted in the squandering of ratepayer investment, unemployment in your state and the loss of a needed carbon free electricity supply. This failure has damaged stakeholders well outside the boundaries of your state. The root cause is not a failure of an organization or process. It is the result of the failure of individuals to perform. Multiple people did not do their job(s). They did not personally invest themselves adequately to exercise financial stewardship, demonstrate personal ownership or provide project oversight. Under performers must feel consequences commensurate with to the significance of their failure.
I don’t know the details of this situation. My sources are the papers I have read. More details will come as the current state investigation continues. However, I am confident the specifics will not change the obvious conclusion(s);

People failed.

Many more will bear the consequences for their failures

It didn’t have to end this way.

Name withheld by request

Now the politics. This scandal was enabled by the passage of the Base Load Review Act in 2007 that allowed the utilities to begin building these nuclear facilities and bill the rate payer in advance plus guarantee SCANA a 10.25 percent profit – even if the project failed, as it did. The legislation was passed in just a few days with only six state House members and no Senators voting against it.

Over the years, the utilities have spent millions of dollars (no one knows how much) to essentially buy the legislature and other state politicians. Is this an unfair statement? Consider these facts and you decide.

Over the years, the utilities spend millions on campaign contributions lobbyists, and dark money payments to legislators and then got their special legislation (written by utility company lawyers) passed in a highly unusual manner in just a few days.

SCANA gave Gov. Henry McMaster $115,000 in campaign contributions in June, just as he’s beginning to negotiate with SCANA. In the first quarter of 2017, he also received $33,500 from the electric co-ops (allied with Santee Cooper). McMaster says he has ‘no intention’ of giving any of the money back.

Not one of the 170 members of the legislature has disclosed how much dark money they have received from the utilities in unreported payments of retainer fees, consulting contracts and the like to themselves and their immediate families.

Recently, 32 legislators were appointed to investigate the utilities scandal and ALL of them have received money from either SCANA or the co-ops and 27 received contributions from both. Only four have returned the money.

In recent years the nine members of the South Carolina Congressional Delegation have received over $630,000 in campaign and other contributions during the time that SCANA was seeking a special tax break from Congress. Three of the politicians have stock in SCANA, and best I know, none recused themselves from working on behalf of SCANA’s special multi-million tax break.
And now, accountability. One thing is absolutely clear – the responsibility for the nuclear debacle rests solely with SCANA and Santee Cooper. And, the second thing that is equally clear is that the SCANA and Santee Cooper boards of directors and management have refused to take responsibility as they have looted their companies for obscene personal gain. Consider this:
The top management of SCANA was paid more than $21 million in performance bonuses during the time that the nuclear project was going down the tubes, and none have resigned and no Statehouse politicians have publicly said they should give the money back.

Last year the top five senior managers of SCANA made on average $2.8 million and CEO Kevin Marsh made $6.1 million and $28 million over the last five years.

At Santee Cooper, last year the top five senior managers (state employees) made on average $321,682 and President Lonnie Carter made $540,929. None of the Santee Cooper board has resigned and only one of senior management, President Lonnie Carter has been forced out.

According to published accounts, Carter’s golden parachute will be worth over $16 million dollars. Carter had previously presided over a $250 million scandal of another botched plant construction. No Statehouse politicians have publicly said he should give it back.

In the last few days, Santee Cooper has refused to hand over to Gov. McMaster and the Legislature a 2015 report by the Bechtel corporation believed to detail how utility officials ignored numerous serious warnings about critical issues in the construction of the two reactors at the V.C. Summer power plant in Jenkinsville.

We are only at the beginning of the beginning of this scandal but three things are absolutely clear:

SCANA, Santee Cooper and the Statehouse politicians are 100 percent responsible. The people who are being asked to pay, the ratepayers, had no responsibility.

The scandal proves that our Statehouse system of politics has become thoroughly corrupt and this corruption is what’s keeping us from having those things we need and deserve – good schools, safe roads, fair taxes, sound pension, and much more.

It does not have to be this way. We do not have to accept this corruption. We can demand accountability and vote the politicians out of office – of both parties- that refuse to personally come clean and reform the corrupt system of good old boy politics that produced this scandal.

The question is will we the voters do our part to clean up the system in the next election?

Phil Noble has a technology firm in Charleston, is founder of World Class Scholars and writes a weekly column for the S.C. Press Association. Contact him at phil@philnoble.com and get his columns at www.PhilNoble.com.